Financial information for management

The syllabus for Paper 1.2 seems broader than the previous Paper 3. However, it will be a relief to many candidates that the quantitative methods have now been removed although the techniques will appear in later papers as the need arises. The management accounting element of the syllabus has increased, and this has meant the inclusion of some topics that were previously seen at higher levels such as pricing and performance measurement. This gives candidates a better opportunity to foresee how management topics are interrelated.

The overall objective of Part 1
This stage sets the scene for the accountancy profession. The examinations concentrate on basic knowledge and skills which form the platform from which professional competence can be developed. The knowledge and skills will be tested separately by subject and will be limited to straightforward examples of application required as a prelude to more complex problems in Part 2.

Skills to be tested in Part 1
Candidates should be able to demonstrate the ability to:

• identify and retrieve information requested;
• make basic judgements on the value of an item of information;
• use and apply concepts and techniques in a straight-forward practical context;
• identify the components of a basic problem and provide a solution;
• present information requested in a logical format;
• communicate information clearly and succinctly.

The exam
Paper 1.2 requires candidates to have a very sound basic knowledge of a number of management accounting techniques that are vital for the candidates’ further studies and for their understanding of the accounting systems under which the candidates may operate.

Paper 1.2 provides a good solid foundation upon which other papers can be built and as such, candidates who sit this exam must have a good understanding of all syllabus areas. Given the breadth of the syllabus and the need for candidates to have a good basic knowledge of it, the exam is structured in the following way so that this can be achieved :

Section A – 25 multiple choice questions (MCQs) worth 2 marks each.
Section B – 5 compulsory questions worth 10 marks each.

Section A
This section establishes whether or not a candidate has a very good basic knowledge of key syllabus areas. The questions in this section will not be complicated as this is contrary to the objectives of a Part 1 exam although, of course, the solutions will all be possible depending on the calculations (and errors) made. In this section I am seeking to ensure that the candidate does really know their ‘stuff’ and hasn’t left out an area of the syllabus.

The 25 MCQs are made up of those requiring either numerical or narrative solutions. Candidates should be able to answer the narrative question fairly quickly since they will either know the topic or not. In this way time is saved so that the longer, sometimes more involved, numerical questions can be attempted within the time allocation of one and a half hours for this section. Candidates should not try and attempt each individual question within 1.8 minutes as this will not be possible in some cases. Time allocation between Section A and B should be strictly adhered to as easy marks can be earned in Section B which should not be sacrificed in an attempt to complete Section A.

It should be noted that if a question is asked on a syllabus area in Section A then it will not appear in Section B. It should be possible for most areas of the syllabus to be examined under either Section A or B, therefore, it will not be possible for candidates to try and pigeon hole certain topics as being more likely to come up in Section A and so perhaps give it less importance.

Section B
This section consists of five 10 mark questions. The aim is to establish whether candidates have fully understood techniques and are able to discuss results, the limitation of a technique or the advantages and disadvantages of a method. These important written parts of questions enable me to establish whether candidates have really understood what they have done. It should, however, be noted that at this level I am not looking for anything other than straightforward, relevant comments. One sentence could just as easily obtain as much credit as a whole page of narrative in the exam. It will be quality and relevance that will earn marks and not quantity.

Candidates should also expect to see a wholly written question in this section. Again basic understanding with clear relevant comments will help a candidate to obtain good marks. Clear and concise presentation will always help to give the impression of a well thought through answer. Once again the solutions to these parts of the paper need not be lengthy, just relevant.

Section B examines candidates’ basic understanding of management accounting. Candidates should look at the solutions that I have given to written sections in the Pilot Paper. Pilot Paper questions and answers can be downloaded at www.accaglobal.com/students

Conclusion
Having taught management accounting at this level for a number of years I am well aware of what candidates usually find straightforward. This is often in conflict with what are considered to be the key syllabus areas. As a result I try to write an exam that is clear requiring only basic knowledge so that if a candidate has studied well and learnt the basic methods then they should be able to answer the questions and obtain good marks. I am aware of the need to strike a good balance between the methods that are vital for future studies and the ability of the candidates. I am, however, always mindful of how daunting this subject can be to a Part 1 candidate and so will not set an exam that can not be attempted and passed by those that have taken the time to understand the basics of the syllabus.

Angela Newman is Examiner for Paper 1.2